Here is an article I put together for my good friends at Telemedia News magazine.
I chaired a panel of mobile music industry experts to find out whats next for mobile music, first at the Heroes Of The Mobile Fringe festival in Barcelona during Mobile World Congress 2013, and then in various locations in London.
This article first appeared in Telemedia magazine to subscribe go to www.telemedia-news.com
You can download the article in PDF format here
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Addition, June 2013, the article was reprinted in the excellent Record Of The Day magazine, download the PDF here
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The music industry has been transformed to near total integration with digital technology. Retailers such as HMV have fallen by the wayside, and smartphones have made the portable MP3 player all but extinct. Today’s super connected music fan expects all content in all places with a variety of discovery, purchase and sharing tools in the palm of their hand.
Fred Bolza, VP of Strategy & Innovation at Sony Music Entertainment gives us his perspective on the changing industry. “The relationship between the artist and the audience is sacrosanct, people who want to help bridge this gap have to add value but no one has an automatic right to be there simply because of history.” Fred is also clear about how this impacts on the role of major record labels in the new digital ecosystem “If we remain focused on making product as our sole offering then our days may well be numbered, however as creative content partners who can help make (and perhaps just as crucially fund) meaningful and sustainable connections with fans then we have a value and that’s where our future lies”.
Jessie Scoullar, a Director at D2C music partners Wicksteed Works explains what’s happening with consumer behaviour: “Over the past couple of years we are seeing a huge rise in access to our clients’ websites from mobile devices, so much that it’s actually driving a new strategy for us. We now develop for mobile first across the board.”
Although consumer behaviour is increasingly mobile first, MNOs and handset companies are playing catch up. Kim De Ruiter, the Head of Mobile Marketing at Cheil Worldwide, explains: “For MNOs and device manufactures it’s predominantly about music being a tool for brand engagement, and not about building the best possible digital music retail store it can be. The graveyard is littered with failed attempts at mobile music stores.”
Mobibase is a global VOD and streaming TV publisher that also offers localised music portals. Their CEO, Vincent Roger, elaborates on why MNOs need to work with the right partners: “We have been working with mobile operators for years and it’s just not their job to be good or successful in music, they need to work across games, videos, everything. Music depends so much on the culture, the context, and the territory. The majors are expensive, even impossible to work with. All this together makes the ecosystem difficult to grow. It is better for carriers to work with the right mobile service provider”.
Alyssa Tisne is the VP of Strategic Partnerships at 7digital, a B2B company whose apps will be preloaded onto 100m smartphones in 2013 including the “Music Hub” on the Samsung Galaxy S4. “We have to be flexible in offering API’s, apps and white label options to carriers and handset companies because there is no one right model in terms of what consumers want.” 7digital have in fact seen a “tenfold increase” in the number of tracks streamed using its API during 2012, and are predicting hundreds of millions of streams this year.
She continues: “There aren’t that many successes to point to in the market, aside from Muve in the US. One of the ways they succeeded was on the training front, telling consumers what they were going to get while they were still in store. It’s not just putting it out there, it comes down to the communication.”
It is clear that a thriving mobile music ecosystem depends on specialists such as 7digital. However, app innovators such as Playmytone and Soniqplay are looking to bring additional levels of interactivity to the mobile music experience. Playmytone extracts key music phrases and allows applications like mashups and mood based programming.
Ohad Sheffer their CEO explains why: “Unless you can provide a powerful and compelling experience, no one is going to pay for your service. We think in order to really sell music you have to take it to a new level in terms of user interaction with the content. Our mission statement is to build apps that allow people to express themselves through their favourite music.”
Martin Macmillan, the CEO of Soniqplay adds a broader marketing perspective: “If you look at brands connecting with consumers, most use music as a passion point. Traditionally everything they have done in the space has been quite reactive and passive, such as giving away a free download. It’s around the music rather then about the music. Now mobile adds a radically new dimension, you effectively have a content creation device in everyone’s pocket, so brands can offer creation experiences”. Soniqplay offer branded apps for the likes of Kiss FM, which can create remixes to be shared and sold in a UK chart eligible format.
Red Bull has not only been extending their brand with their excellent RBMA radio offering, but recently launched a marketing incubator for music startups, mobile in particular. “The evolution of smartphones has had a huge impact on music. It’s now an integral part of pop culture itself,” says Davide Bortot Red Bull Music Academy, and panellist for Red Bull Amplifier. “People use their phones to stream our live events on Red Bull Music Academy Radio, connect with their peers, and share their images and latest discoveries with their communities. We launched Red Bull Amplifier to support the next wave of tech innovation – and apps and other mobile products are sure to play a massive role in this.”
A frictionless upsell experience and an easy mobile payment experience are of paramount importance. My company OpenMarket has been responsible for the rollout of a well known global music streaming service for UK networks Three and Virgin. By connecting the MNOs billing APIs with our own bespoke subscription logic, mobile users are enabled to subscribe to this service and pay directly from their phone bill in seconds. This ease of use and immediacy is nothing less than today’s consumer demands.
Coming back to Alyssa’s point, many end users simply don’t know what they have access to, so some form of mobile engagement outreach is essential for activation and retention. Push notifications have been found to increase app engagement by 50%, and retention by up to 80%. Meanwhile SMS is a simple yet highly effective acquisition mechanic, and is increasingly seen as a premium marketing and communication channel.
So, what’s next for mobile music? For Vincent it is all about streaming services, and about frictionless upselling “from a free experience on the web to a paid experience on mobile devices”. Kim predicts it is “absolutely about increased levels of personalisation, to provide us really with what we want, when we want it. The mobile handset is essentially no longer a phone; it’s a portable computer. If it is going to do everything in your home from programming your TV to controlling your fridge, it will understand all your content interactions and transactions, from Netflix to Google to your supermarket. I think we are going to see that data being used more intelligently.”
Alyssa concludes “The digital transition is pretty much complete, its now time for improvement.” With so many innovative specialists in the market, these improvements can only be good news for music lovers, for mobile companies and for the future of music… see you in the front row!
